February 19, 1992
LIQ-1-09 CO:R:C:E 223645 CCATEGORY:ENTRYLIQUIDATION
Nicholas R. Devine
Assistant District Director of Customs
Office of Commercial Operations
U.S. Customs Service
Detroit, MI 48266RE: Protest and application for further review no. 3801-1- 101099; request for reliquidation under 19 U.S.C. 1520(c)(1); protest of denial of request for reliquidation under 19 U.S.C.
Dear Mr. Devine:
This responds to the referenced protest and application for further review which you submitted by memorandum of December 19, 1991 (PRO-1-CO:CT DA; P1101099/TXTFRISC). The protest objects to Customs denial of a petition for reliquidation under 19 U.S.C. 1520(c)(1). We have reviewed the record and our decision follows.FACTS:
The facts, as we understand them, are as follows: PROTESTANT, an importer of automotive parts, submitted to Customs a request for approval of blanket certifications for specified auto parts that are entitled to duty-free entry under the Automotive Products Trade Act of 1965 (APTA or the Act). The certifications are necessary to obtain duty-free treatment under the Act. (See General Note 3(c)(iii) of the Harmonized Tariff Schedule of the United States and section 10.84 of the Customs Regulations (19 C.F.R. 10.84).) The letter of request is dated April 10, 1990. Prior to approval of the certifications, merchandise was entered on May 7 and May 21, 1990, under dutiable tariff provisions. The certifications were then approved on May 24, 1990, and evidence of such approval was forwarded to PROTESTANT. In August 1990, the entries were liquidated "no change" at the dutiable rate. More than 90 days after, but within one year of, the date of liquidation, PROTESTANT filed a request for reliquidation of the entries under 19 U.S.C. 1520(c)(1). Customs denied this request on the ground that PROTESTANT had "not demonstrated a clerical error, mistake of fact, or other inadvertence" correctable under 19 U.S.C. 1520(c)(1). PROTESTANT then filed the instant protest and application for further review, alleging that an error correctable under the statute did in fact occur and Customs denial of the section 1520(c)(1) request was in error. Specifically, PROTESTANT asserts that a correctable error occurred in Customs liquidation of the entries at a dutiable rate after approval of the certifications.ISSUE:
On the facts set forth above, has an error correctable under 19 U.S.C. 1520(c)(1) occurred?LAW AND ANALYSIS:
The reliquidation provision of 19 U.S.C. 1520(c)(1) is not an alternative to the protest procedure of 19 U.S.C. 1514. It applies only to the limited circumstances described therein. Phillips Petroleum Company v. United States, 55 CCPA 7, 11, C.A.D. 893 (1966). An entry can be reliquidated, notwithstanding that a protest has not been timely filed, to correct a clerical error, mistake of fact, or other inadvertence not amounting to an error in the construction of a law. The burden is on the petitioner to support its request for reliquidation by bringing to Customs attention, within one year of the date of liquidation, the nature of the alleged error, either as it appears from the record or by submitting documentary evidence. 19 U.S.C.
The issue under the instant protest is whether or not PROTESTANT's 1520(c)(1) request was improperly denied. We believe that the reliquidation request was properly denied for failure on the part of PROTESTANT to allege facts that would indicate that some kind of correctable error occurred causing an erroneous liquidation.
PROTESTANT asserts that the correctable error was Customs dutiable liquidation of the entries in question in August 1990, when Customs had approved a blanket certification for duty-free APTA entries on May 24, 1990. To understand that such liquidation is not an error on Customs part, it is necessary to understand the entry process for APTA merchandise in place at Detroit.
First, not all automotive merchandise destined to a bona fide motor vehicle manufacturer in the United States is entitled to duty-free treatment under the APTA. Only such merchandise that is intended for use as original equipment in the manufacture in the United States of a motor vehicle is entitled to the duty exemption. (See General Note 3(c)(iii) of the HTSUS.) Because some automotive merchandise is not so intended at the time of entry, it is entered at a dutiable rate by the importer. Customs accepts such entries as dutiable and does not check with the importer to determine whether or not the exemption is desired. This would be unworkable. The burden is on the importer to enter qualifying merchandise under the duty-free provision by so specifying.
Where merchandise is intended for the qualifying use, and thus duty-free treatment, it can be entered with a claim for duty-free treatment whether or not there is an approved certificate. Where there is no certificate, Customs will request the submission of a certificate, whereupon the importer (or broker) can take steps to obtain approval of a certification. Where a request for approval of a certification has been submitted but not acted upon by Customs, the importer (or broker) will note on the invoice that a request for certification has been submitted and the date submitted. This alerts Customs to the fact that a request has been filed and Customs will then consider the request. Where the request for a certification has been approved, the importer (or broker) will note that fact on the invoice and the date of approval. Usually, this will be enough to obtain a duty-free liquidation of the entry. Occasionally, the APTA file will be checked to verify that there is an approved certification on file for the entered merchandise.
On the facts of the instant case, the PROTESTANT, through its broker, entered the merchandise at a dutiable rate. Customs accepted the entries at face value - that is, as dutiable. Consequently, under the ACS entry processing system (Automated Commercial Systems), a 90 day automatic liquidation date was set, and the entries were liquidated as dutiable in August 1990. Since the request for certification approval was made on April 10, 1990, prior to the filing of the instant entries on May 7 and 21, 1990, the PROTESTANT (through its broker) should have noted such on the invoice. There was no such notation, and the invoices failed to alert Customs to the fact that a request had been submitted. Customs then processed the entries as ordinary dutiable entries.
An importer's recourse in the described situation is to file a protest under 19 U.S.C. 1514 within 90 days of the liquidation. Unless the importer can identify a clerical error, mistake of fact, or other inadvertence, resort to 19 U.S.C. 1520(c)(1) will be ineffective to obtain reliquidation. On the facts here, we do not recognize any such mistake, nor has PROTESTANT identified one. Regarding the fact that PROTESTANT (through its broker) initially filed the entries in question at a dutiable rate, PROTESTANT has not claimed that this act was correctable error, nor, on the facts here, do we believe it to be correctable error. There is no claim by PROTESTANT, nor any indication in the record to suggest, that there was a misunderstanding as to the nature of the entered merchandise. Also, PROTESTANT was aware at all times of the duty exemption provided by the APTA. NEC Electronics U.S.A., Inc. v. United States, 13 CIT 214 (1989).
In summary, we conclude that the remedy PROTESTANT should have pursued is reliquidation under the protest procedure of 19 U.S.C. 1514. PROTESTANT however failed to file a timely protest. Again, reliquidation under section 1520(c)(1) is not a simple alternative for importers who fail to meet the time requirements of the protest procedure.HOLDING:
Customs properly denied PROTESTANT's request for reliquidation under 19 U.S.C. 1520(c)(1), since PROTESTANT failed to allege facts that demonstrate correctable error and no such facts appear on the record.
Based on the foregoing, you are instructed to deny the protest. A copy of this decision should be attached to the Form 19, Notice of Action, to be sent to the PROTESTANT.
Sincerely,
John Durant, Director